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Google acquires Postini, channel impact uncertain

Google could leverage the partner relationships of email security vendor Postini and its other wholly owned subsidiaries, but analysts are uncertain what affect these acquisitions will have on the channel.

Google Inc. has agreed to acquire security and compliance vendor Postini Inc. for $625 million in cash, promising to use the company's technology to harden defenses around its popular line of hosted applications.

The move's affect on the channel is not immediately clear. Paul Myerson, a senior channel analyst at the Enterprise Strategy Group in Milford, Mass., said Google is getting closer to the channel through its acquisitions.

"If Google learns to leverage channel partner relationships of their wholly owned subsidiaries, they could have an advantage in establishing channel relations for future Google solutions," Myerson said in an email.

But Chenxi Wang, a principal analyst for Forrester Research in Foster City, Calif., said Google is likely to integrate its hosted applications with Postini's security features and sell directly to enterprise customers.

"(Google) will try taking advantage of Postini's partner's customers," Wang said. "I doubt that the partners will be doing the integration. Google will just up-sell Postini customers to be Google customers."

Postini, a San Carlos, Calif.-based vendor that sells email and messaging security and compliance tools, has 35,000 customers. Its services include message security, archiving, encryption and policy enforcement to protect a company's email, instant messaging and other Web-based communications.

Under the terms of the agreement, Google will acquire Postini for $625 million in cash and Postini will become a wholly-owned subsidiary of Google, according to a press release the companies issued Monday morning. The deal is expected to close by the end of the third quarter 2007.

"With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes. With the addition of Postini, our apps are not just simple and appealing to users -- they can also streamline the complex information security mandates within these organizations," said Eric Schmidt, Google's chairman of the board and chief executive officer, in a statement.

Postini's security tools are sold to companies in a hosted model. The vendor's Perimeter Manager service offers email content filtering and spam blocking features. The software quarantines or tags suspicious email before it reaches a company's perimeter.

The search giant claims its popular line of applications, including Gmail, Calendar, Talk, Docs & Spreadsheets and Personal Start Page, has been adopted by more than 100,000 businesses to date. But Dave Girouard, vice president and general manager of Google Enterprise, admits security concerns have prevented some companies from embracing Google tools.

"By adding Postini products to Google's technology, businesses no longer have to choose -- employees get the intuitive products they want, and the company achieves the security and assurance it needs," Girouard said in a statement.

This is the latest in several moves Google has made recently to bolster its security. In May, Google announced its acquisition of Mountain View, Calif.-based security firm GreenBorder Technologies Inc., which specializes in sandbox technology to defend email and Web users from malware. Around the same time, the search giant started the Google Security blog.

The acquisition also reflects the larger trend of consolidation in the IT security market, as standalone security vendors struggle to survive and big IT infrastructure providers use acquisitions to integrate more security into its product development lifecycles. In the last month, for example, HP announced its acquisition of SPI Dynamics and IBM announced its purchase of Watchfire Corp.

While IT professionals have lauded the smoothness of some acquisitions, such as the merging of Internet Security Systems (ISS) into IBM and the merging of CipherTrust Inc. into Secure Computing Corp., they say they've watched other vendors buy up good security technology only to let it languish.

Quentin Gallivan, president and chief executive officer of Postini, promises that won't happen when his company becomes part of Google.

"We share a commitment to providing enterprise customers with compelling technology alternatives," he said in a statement. "This is an exciting milestone, one that will certainly lead to the next level of rapid innovation."

Google said it will continue to support Postini customers and invest in Postini products.

Features writer Colin Steele contributed to this report for

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